The decision announced by Russian Foreign Ministry spokeswoman Maria Zakharova comes in the wake of a resolution passed recently by the European Parliament calling for Russia’s expulsion from the SWIFT financial network.
In an interview with RT television network, Zakharova said while Russian authorities still assess the likelihood of being cut from the Western payment system, they are already working to reduce risks and possible damage.
“So, as an alternative to SWIFT, the system of transferring financial communications of the Bank of Russia is considered,” she said.
“We study the options for pairing with foreign systems, such as European SEPA, Iranian Sepam, Chinese Cup and CIPS,” Zakharova added.
The Cross-Border Interbank Payment System (CIPS) is a payment system which offers clearing and settlement services for participants in cross-border payments and trade in renminbi, China’s official currency. China Union Pay (CUP) works like other online payment systems and has a significant financial market infrastructure in China.
Iran unveiled Sepam in October 2013, suggesting that members of the Asian Clearing Union (ACU) employ a home-grown system developed by the Central Bank of Iran to get around SWIFT.
The ACU, headquartered in Tehran, was established at the initiative of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) in 1974. Its members include Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal, Pakistan, Sri Lanka and Iran.
Russia’s tensions with West
Russia’s possible withdrawal from SWIFT has accelerated in recent weeks amid rising diplomatic tensions between Moscow and the West.
Last month, US President Joe Biden unveiled a new package of sanctions against Russian businesses and officials, effectively banning American financial institutions from buying shares in Russian sovereign debt.
The UK and the EU have both since rolled out their own sanctions, and there is talk in European capitals of more measures to come.
On Monday, the European Union summoned Russia’s ambassador to the bloc over Moscow’s decision to bar eight officials from entering the country, which the Kremlin said was in retaliation for sanctions imposed on Russian citizens by the EU.
In her interview with RT over the weekend, Zakharova said Russia is working to cut Western influence out of its economy.
She said the new restrictive measures are “having a complex negative impact on both Russian and Western economies”.
According to Zakharova, the price of playing out hostilities through the financial markets is high, and “estimates of the damage vary, but are well within the hundreds of billions of dollars”.
“Unfortunately, the reality of our time has been the increased use of politically motivated unilateral measures by some Western states, mainly the US,” she said.
One reason, she said, is that Washington and its allies “seem to find it difficult to accept the obvious successes of the Russian economy, the increase in its international competitiveness and the expansion of the presence of quality Russian goods and services on world markets”.
While a number of West European nations are still languishing in lockdowns amid the COVID-19 pandemic, most Russian businesses have been trading with few restrictions even as the ruble has been hit hard by falling oil prices, geopolitical uncertainty, and the global recession.
Late last month, the European Parliament passed a non-binding resolution which called for the harshest possible steps to be taken against Russia. Lawmakers behind the motion called for imports of oil and gas from Russia to the EU to be immediately stopped.
They also demanded that Russia be excluded from the SWIFT payment system, and all assets of oligarchs close to Russian authorities and their families in the EU be frozen and their visas canceled.
Alternatives to SWIFT
SWIFT is a financial messaging system that connects banks and other financial institutions around the world to exchange information about financial transactions in a secure manner. It has a virtual monopoly as the switchboard of the international financial system.
The network is headquartered in Belgium, but its board of directors consists of executives from American banks. Since 2001, SWIFT is said to be cooperating with the United States in its economic warfare by giving Washington access to the bank-to-bank transfer information contained in the platform’s databases.
For years, Washington has threatened that it may cut off Russia’s access to the SWIFT system. In 2012, for the first time ever, SWIFT unplugged designated Iranian banks from its system, in accordance with a European directive and under the threat of possible US legislation.
Member banks including from China and Russia are now increasingly questioning SWIFT’s relevance for failing to uphold its charter as an apolitical and neutral platform and turning into a mere tool of the West.
Alternative networks are being created to challenge SWIFT’s hold on its position as the core global banking communications system.
Already, the Iranians have resorted to using the Internet and faxes to send messages to brokers and banks as a means of replacing SWIFT messages.
Russia, China and India – members of the world’s emerging economies known as the BRICS – have decided to create their own messaging system that will connect around 3 billion people and circumvent SWIFT.
Russia launched its homegrown financial messaging system SPFS in 2014 after Washington threatened to expel it from SWIFT, and the first transaction via the platform took place in December 2017.
Russian Foreign Minister Sergei Lavrov said during a meeting with his Chinese counterpart Wang Yi last month that the dollar should be de-prioritized as the default currency of international markets, and world nations should move away from the use of “Western-controlled international payment systems”.